From corporate restructuring to high-yield investments, Hugh Hilton blends creativity and discipline to drive success.
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Show Notes:
In this Mission Matters episode, Adam Torres interviews Hugh Hilton, CEO of Alvarez & Marsal Capital Real Estate, at the Korea Conference in Marina del Rey. Hugh discusses his journey from early restructuring projects to leading large-scale, value-oriented investments worldwide. He reveals how creative thinking and strategic foresight help uncover opportunities in distressed assets, industrial developments, and beyond.
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Full Unedited Transcript
Hey, I’d like to welcome you to another episode of Mission Matters. My name is Adam Torres, and if you’d like to apply to be a guest in the show, just head on over to mission matters.com and click on Be Our Guest to Apply. All right, so today I’m in Marina del Rey, California. I’m at the Korea conference.
I’ve been covering this conference for the last. Three or four years. And let me tell you, I do not miss it. If you wanna know what’s going on in Korea, what’s going on in entrepreneurship, you need to be here. And my next guest is Hugh. Hugh, welcome to the show. Well, thank you very much. Glad to be here.
All right. So energy today, watching those pitches, watching those presentations. H how do you feel? I thought they were. Wonderful. I, I thought some of the products were just cutting edge technology and just amazing. Mm. What brings you out? Like how, how are you connected to the conference? How you, I’m a long, long term friend of Jenny’s probably 15 plus years.
Oh, so hold on. Were you one of the ones that were, or that were invited to the holiday party when this was a holiday party back then? Yeah. Yes. Yes. I didn’t know Johnny back then. I just, I just got called when they’re like, come do some interviews. I wasn’t special enough to be at the holiday party. So you were an original.
Yeah. I’m one of the originals. So, so I gotta ask another question then. Sure. How did, how, like watching what it’s grown into, that’s, it’s, it’s gotta be amazing. Oh, it’s, it’s amazing. Talk about what you’ve seen in terms of the evolution. ’cause it’s, I wanna document this. It’s just. Every year it’s, it’s just gotten better and better and Jenny’s done such a wonderful job and every year she somehow figures out how to even improve it more.
Yeah. So I, that’s, I’m so impressed with what she’s done. Yeah. It’s just really amazing to watch and, and meet the people here. It’s been really fascinating to me and seeing all these young entrepreneurs and what they’re doing. And this year was particularly interesting to me because of the. Focus on AI and where that’s going.
Yeah, and, and seeing some of the, how should I say, comprehensive understanding and application of AI by some of the presenters. I’m just, it’s just was. So stimulating to me, intellectually. So now that you bring that up, I would say that you’re right. Every year it does get better and better. Yeah. And I say that this is the first year, at least for me personally, I was like, I feel like I’m ahead of certain trends by being here.
Mm-hmm. Like certain conferences you go to, you’re like, like milking conference. I’ve been covering milking conference for years now. Yeah. And I’m there and when you go to a certain thing, you’re like, you’re like, oh, wait a minute. I have information that maybe some other people don’t have now. ’cause I’m here to this year.
Jen, they nailed it. Yes. Like I was like, wait a minute. I’m like, what was going on in enterprise and AI and like the siloed event? I was like, mind blown. Me too. And I actually got their cards. Because we’re a global restructuring firm, we have over 15,000 employees, 46, 48 offices around the world. Yeah. And there.
Expression and and explanation of AI was so good. I’m just gonna introduce them to our firm and suggest when our clients need AI applications that they should. Reach out to these firms to as the point to mm-hmm. Do those assignments. Yeah. ’cause it’s just very impressive. Yeah. I was impressed. So speaking of, speaking of what you do, may maybe get into it a little bit more.
Tell us a little bit more about what you’re working on, any projects or otherwise. What. I, I’m, I’m employee number seven of this firm. Mm-hmm. That’s 15,000 employees. So my original background was in investment real estate. Mm-hmm. But when I joined Alvarez and Marcel only seven employees mm-hmm.
Before I knew what I was doing, corporate restructuring. So I spent 20 years doing corporate restructuring. And then Brian and Tony. Wanted to start a real estate investment platform. Mm-hmm. We also have a private equity platform. Yeah. Called Real Alvar, Marcel Capital Partners. And so then he asked me to head up a real estate investment platform for their family offices.
And we have another large family office that we invest on behalf of. And what I’ve been able to do is take a lot of the things. That I learned because I ran a two and a half billion dollar yeah private equity platform back in the late eighties before I joined Alvar and Marcel. So I was able to take that expertise, but also blend into it all the restructuring expertise I got in terms of the creativity of.
Solving major problems that most people couldn’t figure out. What year was this roughly when you were working on that? Like initially, I’m just curious. Just to first started in 89 when I did my, wow. So this is like, this is like, you, you guys were writing the game back then? Yeah. No, it was, it’s not that long ago.
But you were writing the game, like really? Absolutely. Like there wasn’t, it’s not like it was off set. People think that it was just all these things. Recess, somebody had to do it. Right. And then, you know, our big break came with Lehman Brothers. We, we ran Lehman Brothers did the wind down and Lehman Brothers, and then that just wow.
Exploded the platform. Yeah. And it’s just been a great journey and, and doing all the restructures really helped in our investing because we are, we’re very value oriented. We, we, we don’t pay retail. Mm-hmm. And that’s the, the DNA from having all the distressed workouts and having to create value out of distress.
So we’re very comfortable investing in distressed assets. Mm-hmm. And because we’re comfortable that we can see. Re outcomes and options Yeah. That traditional people don’t see ’cause they haven’t run into those Mm. In their, in their business life. So it’s been really interesting right now. And so, given your background, given what you’ve seen, whether it’s in restructuring real estate or otherwise mm-hmm.
Obviously there’s the AI side, but I’m curious outside of ai, like what are you following? Like what kind of trends in the market could be anything? Business, real estate, whatever you want. Like what gets you excited right now? Like, oh, there’s opportunities. The, there’s, you know, we. We’ve done a lot, you know, almost a, we have round tripped almost a billion dollars when we finish up with our current wow assets on this platform.
But we’ve always wanted to get into multifamily and industrial because they’re great real estate, but the yields have been too low. Mm-hmm. So what we’ve done is we’ve developed a product called lp, LP Plus for industrial, where we’ll come in and we’ll. Co-venture the development. Mm-hmm. With a developer.
Then when it’s stabilized, we’ll buy out the developer who has a small piece. Interesting. And then we’ll end up with a yield that’s about 15 to 20% higher than if you bought it at retail once it was leased. Yeah, so we, there’s a really great spread, a yield spread that we can offer our clients without taking much risk.
Mm. So it’s, it’s looking, it’s coming up with interesting competitive strategies that other people don’t see. And like in this, when we started with COVID, we were one of the early people into creative office. Then as COVID got worse, we pivoted out of that into life science because we realized you can’t.
Do life science remotely. Mm-hmm. You have to go in to do all things that sense. Yeah, yeah, yeah. There and then as physical. Exactly. And then as we came out of C, then we pivoted in and we did a very large retail deal. Mm-hmm. And people didn’t see it at the time, but our premise was, okay, we’re coming outta C.
And everybody thought that the large. Percentage of online buying would continue. Yeah. But it didn’t, it went right down to back to where it was before COVID. Yeah. So maybe 15 to 18% was online purchase. It got up to 65% during COVID. Mm-hmm. And everybody thought it would continue, but it didn’t, and we bet that it wouldn’t.
Wow. And so we’ve done really well in that as well. Man, you, it’s great. It’s great. It’s just fun, you know? It’s great. Yeah. You’re out here playing. It’s, you’re like kid in a candy store, kid. Yeah, you are. You’re absolutely right. Yeah. You’re over here like, what are we under construction at? Exactly. What can I get my hands on?
Right. Can we do creatively? You know, it’s, it’s funny, we, we did a large deal in, in Colorado where. I started, I had a friend, I ran a big casino restructured casino in Las Vegas. And, and the friend of mine at GE was, was getting jacked around by the secured creditors. And so I came in and when I got there, EBITDA was 15 million.
The debt was trading at 50 cents. And within 18 months I got EBITDA to 65 million and the, and the debt was trading at 106 cents dang above face value. So. Everybody got paid off. It was a great outcome. And then wow, 15 years later, I stayed in touch with him and he said, Hey, we’ve got this project outside of Boulder.
It’s an old hard drive, dis manufacturing facility. We don’t know what to do with it. Mm-hmm. So we came in and looked at it and said, this really has potential. And they were looking out, no, it’s a hard disc. I said, no, this can be really a creative campus. So it was funny. Micron came in and they said. We’d like to lease 15,000 feet, and we said, why don’t you lease the whole thing?
Mm. They said, oh, I never thought of that. And then they ended up leasing 200 plus thousand square. It was the largest Wow. Industrial lease in the state of Colorado in in 2000, 2021. And so it’s just those, yeah. Interesting things. Seeing things that other people don’t see, and so it’s just that. Curiosity and creativity.
Man, that’s different, man. That’s great. Yeah. That’s cool. Well, well, I, well, I want, well get creative. I want a Vegas residency. You just mentioned Vegas, man, I want my residency. I’m working on it. I’m working on it. Good. Good for you. So we’ll figure it out. You watching? I want it. Casinos. You get me in that casino.
All right, watch out. Not all. There you go. Well, last thing I want you do, Hugh, look into the camera. If somebody wants to follow up, if they wanna learn more or connect, how do they do that? They get a, they can contact me on LinkedIn. I’m on LinkedIn. That’s probably the easiest way to do, or awesome.
Wonderful. Or they can just go on our website and our, my contact information is on our website, Alvarez marcel capital realestate.com. Mm-hmm. Amazing. And for everybody watching, just so you know, we’ll definitely put some links in the show notes, so you can just click on the links and head right on over.
And speaking of the audience, if this is your first time with Mission Matters and you haven’t done it yet, hit that subscribe or follow button. This is a daily show. Each and every day we’re bringing you new content, new ideas. And hopefully new inspiration to help you along the way in your journey as well.
So again, hit that subscribe or follow button. And Hugh, man, appreciate you. Thank you. Mm-hmm. Thank you, Adam. I had a wonderful time.
